Wednesday, September 30, 2009

Gold and the Dow - Technical Musings

src="http://pagead2.googlesyndication.com/pagead/show_ads.js">Great day for Gold - back above $1000/oz (chart courtesy of kitco.com):

Here's a 3 year daily chart of Gold thru today's close:

If we go higher tomorrow, it is an easy trade to go long with minimal risk by placing a stop loss a few bucks below $1000. I'm currently long RGLD, TRE and RIC and remain a long-term holder of physical Gold.

The Dow, unlike Gold, looks sick and toppy. It has broken down out of its terminal wedge, a very bearish sign after the type of bear market rally we have had and the economic conditions. Here's a 1 year 60 minute intraday candlestick chart:

The U.S. Dollar was MIA today. Man, this is a sick looking currency - and I am a [current] deflationist! The U.S. Dollar rally looks like it may have to wait a while for its intermediate term rally to get going. This, of course, is bullish for Gold but I am again looking for both currencies (Gold is money) to rise together later this fall.

By the way: ALL-TIME NOMINAL NEW HIGHS ON A MONTHLY CLOSING BASIS FOR GOLD WHEN PRICED IN U.S. DOLLARS.